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Whitney Houston had her fair share of chart-toppers, even posthumously on iTunes and Amazon, and though the superstar’s finances took a hit during her personal struggles, it is still believed to be a substantial estate that will only get larger.

While there were recent reports that Houston was struggling financially, the sales of her music after her death will improve the condition of her estate, as will the fact that she’ll no longer be burning through cash. Michael Jackson sold over 8 million albums in the U.S. alone in the six months after his death, and close to 30 million worldwide.

Although details of her estate and will have not been made public it is believed that her only child, daughter Bobbi Kristina Brown, 18, will be the main beneficiary. Houston had a will and the estate process is ongoing, according to a source familiar with her affairs.

Zach Greenburg, Forbes writer, said Whitney Houston will not match Jackson’s postmortem earnings, but if her music sells even half as well as Jackson’s did, her artist royalties alone could bring the estate more than $10 million in the coming year.

Houston made millions for her roles in “The Bodyguard” in 1992 and “The Preacher’s Wife” in 1996, the latter for which she reportedly earned $10 million. And in 2001, Houston renewed her contact with Arista Records, signing a $100 million deal, one of the biggest recording deals in the history of the music business, Variety reported at the time. The deal called for at least six albums and two greatest-hits compilations. Her comeback album, “I Look to You,” was released in 2009.

Houston is the 20th top-selling artist in the U.S. of all time, selling 55 million records, according to the Recording Industry Association of America. The single, “I Will Always Love You,” from “The Bodyguard” soundtrack is the longest running number one single from a soundtrack album.

Houston’s “Nothing but Love” world tour, from December 2009 through June 2010, was her last. The tour, her first in ten years, grossed millions of dollars.

Keith Caulfield, Billboard’s associate director of charts, said while Houston’s sales will not come close to the financial success of Michael Jackson, who had publishing, song-writing and recording royalties, her greatest hits album will re-enter Billboard’s Top 10 chart possibly this week. Already, 50,000 were sold in the first day or two after her death.

However, Caulfield said it is difficult to estimate how much Houston will receive because how her contract was structured is unknown.

“Certainly, we would expect that her estate won’t be broke,” said Andrew Mayoras, attorney and co-author of the book, Trial & Heirs: Famous Fortune Fights!, even if the reports of her financial struggles were true.

A source familiar with Houston’s financial situation told ABCNews.com that “she was far from broke.”

The surging sales of Whitney Houston’s music may be a large boost to her estate, as with other artists after they have passed away. Jimi Hendrix is an example of an estate which grew from almost nothing into a huge, multi-million dollar venture, said Mayoras.

Houston also completed the filming of “Sparkle,” produced by Sony’s TriStar Pictures, and it is scheduled to be released in September. Houston plays the mother of “American Idol’s” Jordin Sparks in the film.

Andrew Katzenstein, estate lawyer with Proskauer Rose LLP in Los Angeles, said it is difficult to estimate her royalties because her earnings will be multiplied by an unknown formula, possibly dependent on the recent sales of her songs. He also said her earnings could be less with digital distribution, through services like iTunes.

“But she’s an international star, and her music was fantastic,” Katzenstein said.

Like other celebrities, Houston also had public financial and legal tangles, including struggling with drugs and alcohol. After her divorce with R&B artist, Bobby Brown, in 2007, Brown reportedly sued Houston for custody and spousal support.

Bobby Brown said he was “deeply saddened at the passing of my ex-wife.”

“At this time, we ask for privacy, especially for my daughter, Bobbi- Kristina,” he said in a statement. “I appreciate all of the condolences that have been directed towards my family and I at this most difficult time.”

Her stepmother sued Houston over a $1 million life insurance policy from her late father, John Houston.

Houston had lent her father $723,800 in August 1990 for the purchase and renovation of a home in New Jersey in which he lived with his wife, Barbara. When John Houston died in February 2003, he bequeathed all his assets to his widow.

“Although Barbara and Whitney may be considered stepmother and daughter, that relationship never really jelled,” the court filing stated.

Barbara inherited the property, though Whitney owned the mortgage on the house and was the named life insurance beneficiary. But Barbara claimed the life insurance money was meant to repay Whitney for that mortgage. When Whitney refused to credit the life insurance money against the mortgage, Barbara sued in 2008.

Though the case was finally dismissed in December, Houston’s attorney, Bryan Blaney, told ABC News on Monday Houston had planned to file a complaint to have her stepmother evicted from the property.

“It’s no different that it’s her property, or the property of her estate, which would go to her daughter or whoever her beneficiary is,” Blaney said.

Blaney said the complaint was prepared before Houston’s death but it has not been filed for reasons “unrelated to anything of significance.” He said he expects to be updated by her manager.

“I don’t think there will be any reason not to file the complaint,” Blaney said. “I can only tell you there’s a whole lot of things going on with the folks right now in regards to her manager and family members.”

Blaney said he was “devastated” by the loss of Houston, who was a “tremendous” person.

“I always thought it was sad that people would reach out to make her life more difficult than it needed to be,” he said. “I always found her to be a sensitive and nice person and whatever issues she might have had, I can’t comment. I don’t know them.”

Blaney represented Houston to dismiss the charge of drug possession in her suitcase at an airport in Hawaii in 2000.

“I think she became an easy target for tabloids,” he said. “There were instances that were plainly unfair in tabloid editions of her just to sell newspapers.”

Barbara Houston, who declined to comment, continues to reside in the property in Fort Lee, N.J., her attorney, Gilberto Garcia, said.

“It’s a sad thing what happened for everyone involved,” Garcia said of Whitney Houston’s death. “She was a great figure and a great voice. She was a good daughter to her father.”

Garcia said Barbara Houston sent condolences to Houston’s attorney.

“My client is quite shaken up by this,” Garcia said. “I don’t know that the case matters much in comparison to everything that’s going on.”

Mayoras said he assumes Houston used life insurance of some type to protect her daughter, Bobbi Kristina, regardless of reports of any financial struggles.

The state of the multiple Grammy and Billboard music award winner’s finances are unknown at the time of her unexpected death. Her estate will profit from royalties for future sales of her songs, as well as licensing deals for her name, image and likeness.

Ideally, Houston would have set up at least a revocable living trust to provide for her daughter, so she doesn’t receive everything at once, Mayoras said.

“Most people with even a modest amount of wealth use trusts to control how and when their money is passed,” he said. “For example, we would hope Whitney would have spaced out Bobbi Kristina’s distributions over time, so that she would receive a percentage as she reaches certain ages. Most 18-year-olds are not mature enough to handle a substantial inheritance.”

Ideally, Whitney would have named a trust as the beneficiary of any life insurance, Mayoras said. Otherwise the money would go directly to the named beneficiary, possibly Bobbi-Kristina.

Depending on whether updated she updated her documents after her divorce from Bobby Brown, there could be complications if he is named as a beneficiary, Mayoras said.

“Hopefully, she would have taken steps to update her documents to eliminate anything going to Bobby Brown, ” Mayoras said, “unless, of course, she wanted him to receive something. But many people don’t take the time to update their estate planning documents after a divorce.”

Houston did sell a home in Alpharetta, Ga. for $1.19 million in May 2007, shortly after the divorce, for which Houston had received a notice of default. Houston bought the home in 2003 for $1.38 million by taking out a 15-year mortgage for $1.1 million, according to public records. The home was where the 2005 reality television show, “Being Bobby Brown,” was filmed. Houston had a county tax lien on the property for $17,644 in December 2005, according to public records.

Houston had a handful of properties that she unloaded or tried to unload recently. She also sold a house in Mendham, N.J. for $940,000 in January 2010. She also listed another home in Mendham for $2.5 million in 2009, Zillow reported. Houston reportedly owned a home in New Bergen, N.J. that she bought in 1989 for $955,000.

Without doubt this news you hear today is stuffed with tales from the early dying of pop star Whitney Houston. It’s another tragic finish to some existence cut way too short. I’m not taking a chance how she died or why. I only desire to explain that existence can finish very all of a sudden for anybody anytime! That’s the life insurance coverage consultant within me.

While I must admit I wasn’t a large follower of Ms. Houston, I can tell in the amount of reviews, blogs and posts that there have been many people who have been very keen on her. It is indeed my hope that good quality may come out of this tragedy which it’ll keep others from making exactly the same mistakes.

Like a life insurance coverage fanatic, the very first factor that found my thoughts was I question just how much life insurance coverage this 48yr old lady had and when she’d done any estate planning. When individuals die this youthful, many occasions estate planning hasn’t entered their mind. You will find lots of tales available that highlight this statement. Actually, we’ve used this fact in our marketing pieces. It’s known as Much More Training From Notoriously Bad Estate Planning and that we provide to financial experts hoping that they’ll make use of the details to assist them to convince their customers to organize. The piece does the selling for you personally! You create it for your customers plus they take about ten minutes to take a look and you request these to let you know about their estate planning. Hopefully they let you know their exact plans. Odds are they cannot. Otherwise, guess what happens to complete next.

Again, I don’t want to minimize the death of Whitney Houston but it does give us the chance to talk to clients about what we do and why we do it. We are there in the lowest point in people’s lives and can give them support like no other profession

LOS ANGELES (AP) — Whitney Houston, who ruled as pop music’s queen until her majestic voice and regal image were ravaged by drug use, erratic behavior and a tumultuous marriage to singer Bobby Brown, has died. She was 48.

Houston’s publicist, Kristen Foster, said Saturday that the singer had died, but the cause and the location of her death were unknown.

News of Houston’s death came on the eve of music’s biggest night — the Grammy Awards. It’s a showcase where she once reigned, and her death was sure to case a heavy pall on Sunday’s ceremony. Houston’s longtime mentor Clive Davis was to hold his annual concert and dinner Saturday; it was unclear if it was going to go forward.

“I am absolutely heartbroken at the news of Whitney’s passing,” music producer Quincy Jones said in a written statement. “I always regretted not having had the opportunity to work with her. She was a true original and a talent beyond compare. I will miss her terribly.”

At her peak, Houston the golden girl of the music industry. From the middle 1980s to the late 1990s, she was one of the world’s best-selling artists. She wowed audiences with effortless, powerful, and peerless vocals that were rooted in the black church but made palatable to the masses with a pop sheen.

Her success carried her beyond music to movies, where she starred in hits like “The Bodyguard” and “Waiting to Exhale.”

She had the he perfect voice, and the perfect image: a gorgeous singer who had sex appeal but was never overtly sexual, who maintained perfect poise.

She influenced a generation of younger singers, from Christina Aguilera to Mariah Carey, who when she first came out sounded so much like Houston that many thought it was Houston.

But by the end of her career, Houston became a stunning cautionary tale of the toll of drug use. Her album sales plummeted and the hits stopped coming; her once serene image was shattered by a wild demeanor and bizarre public appearances. She confessed to abusing cocaine, marijuana and pills, and her once pristine voice became raspy and hoarse, unable to hit the high notes as she had during her prime.

“The biggest devil is me. I’m either my best friend or my worst enemy,” Houston told ABC’s Diane Sawyer in an infamous 2002 interview with then-husband Brown by her side.

It was a tragic fall for a superstar who was one of the top-selling artists in pop music history, with more than 55 million records sold in the United States alone.

She seemed to be born into greatness. She was the daughter of gospel singer Cissy Houston, the cousin of 1960s pop diva Dionne Warwick and the goddaughter of Aretha Franklin.

Houston first started singing in the church as a child. In her teens, she sang backup for Chaka Khan, Jermaine Jackson and others, in addition to modeling. It was around that time when music mogul Clive Davis first heard Houston perform.

“The time that I first saw her singing in her mother’s act in a club … it was such a stunning impact,” Davis told “Good Morning America.”

“To hear this young girl breathe such fire into this song. I mean, it really sent the proverbial tingles up my spine,” he added.

Before long, the rest of the country would feel it, too. Houston made her album debut in 1985 with “Whitney Houston,” which sold millions and spawned hit after hit. “Saving All My Love for You” brought her her first Grammy, for best female pop vocal. “How Will I Know,” ”You Give Good Love” and “The Greatest Love of All” also became hit singles.

Another multiplatinum album, “Whitney,” came out in 1987 and included hits like “Where Do Broken Hearts Go” and “I Wanna Dance With Somebody.”

The New York Times wrote that Houston “possesses one of her generation’s most powerful gospel-trained voices, but she eschews many of the churchier mannerisms of her forerunners. She uses ornamental gospel phrasing only sparingly, and instead of projecting an earthy, tearful vulnerability, communicates cool self-assurance and strength, building pop ballads to majestic, sustained peaks of intensity.”

Her decision not to follow the more soulful inflections of singers like Franklin drew criticism by some who saw her as playing down her black roots to go pop and reach white audiences. The criticism would become a constant refrain through much of her career. She was even booed during the “Soul Train Awards” in 1989.

“Sometimes it gets down to that, you know?” she told Katie Couric in 1996. “You’re not black enough for them. I don’t know. You’re not R&B enough. You’re very pop. The white audience has taken you away from them.”

Some saw her 1992 marriage to former New Edition member and soul crooner Bobby Brown as an attempt to refute those critics. It seemed to be an odd union; she was seen as pop’s pure princess while he had a bad-boy image, and already had children of his own. (The couple had a daughter, Bobbi Kristina, in 1993.) Over the years, he would be arrested several times, on charges ranging from DUI to failure to pay child support.

But Houston said their true personalities were not as far apart as people may have believed.

“When you love, you love. I mean, do you stop loving somebody because you have different images? You know, Bobby and I basically come from the same place,” she told Rolling Stone in 1993. “You see somebody, and you deal with their image, that’s their image. It’s part of them, it’s not the whole picture. I am not always in a sequined gown. I am nobody’s angel. I can get down and dirty. I can get raunchy.”

It would take several years, however, for the public to see that side of Houston. Her moving 1991 rendition of “The Star Spangled Banner” at the Super Bowl, amid the first Gulf War, set a new standard and once again reaffirmed her as America’s sweetheart.

In 1992, she became a star in the acting world with “The Bodyguard.” Despite mixed reviews, the story of a singer (Houston) guarded by a former Secret Service agent (Kevin Costner) was an international success.

It also gave her perhaps her most memorable hit: a searing, stunning rendition of Dolly Parton’s “I Will Always Love You,” which sat atop the charts for weeks. It was Grammy’s record of the year and best female pop vocal, and the “Bodyguard” soundtrack was named album of the year.

She returned to the big screen in 1995-96 with “Waiting to Exhale” and “The Preacher’s Wife.” Both spawned soundtrack albums, and another hit studio album, “My Love Is Your Love,” in 1998, brought her a Grammy for best female R&B vocal for the cut “It’s Not Right But It’s Okay.”

But during these career and personal highs, Houston was using drugs. In an interview with Oprah Winfrey in 2010, she said by the time “The Preacher’s Wife” was released, “(doing drugs) was an everyday thing. … I would do my work, but after I did my work, for a whole year or two, it was every day. … I wasn’t happy by that point in time. I was losing myself.”

In the interview, Houston blamed her rocky marriage to Brown, which included a charge of domestic abuse against Brown in 1993. They divorced in 2007.

Houston would go to rehab twice before she would declare herself drug-free to Winfrey in 2010. But in the interim, there were missed concert dates, a stop at an airport due to drugs, and public meltdowns.

She was so startlingly thin during a 2001 Michael Jackson tribute concert that rumors spread she had died the next day. Her crude behavior and jittery appearance on Brown’s reality show, “Being Bobby Brown,” was an example of her sad decline. Her Sawyer interview, where she declared “crack is whack,” was often parodied. She dropped out of the spotlight for a few years.

Houston staged what seemed to be a successful comeback with the 2009 album “I Look To You.” The album debuted on the top of the charts, and would eventually go platinum.

Things soon fell apart. A concert to promote the album on “Good Morning America” went awry as Houston’s voice sounded ragged and off-key. She blamed an interview with Winfrey for straining her voice.

A world tour launched overseas, however, only confirmed suspicions that Houston had lost her treasured gift, as she failed to hit notes and left many fans unimpressed; some walked out. Canceled concert dates raised speculation that she may have been abusing drugs, but she denied those claims and said she was in great shape, blaming illness for cancellations.

19 thoughts on “Whitney Houston Life Insurance”

As a life insurance fanatic, the first thing that came to my mind was I wonder how much life insurance this 48yr old woman had and if she had done any estate planning. When people die this young, many times estate planning has not crossed their mind. There are plenty of stories out there that highlight this statement. In fact, we have used this fact in one of our marketing pieces. It is called Even More Lessons From Famously Bad Estate Planning and we give it out to financial advisors in hopes that they will use the facts to help them convince their clients to plan. The piece does the selling for you! You give it to your clients and they take about 10 minutes to look it over and then you ask them to tell you about their estate planning. Hopefully they can tell you their exact plans. Chances are that they cannot. If not, you know what to do next.

Whitney Houston had frittered away her $100 million fortune on years of drug abuse and high living and was on the skids when she died.

Decades of narcotics use took such a toll on the R&B queen, who once sold more than 170 million albums, that she was reduced to asking friends for $100 handouts. She was leaning heavily on her mentor, music mogul Clive Davis, for financial help to keep her homes in New Jersey and Atlanta out of foreclosure.

WHITNEY’S BODY ARRIVES HOME

And she had struggled through a years-long legal battle with her stepmother over a $1 million life insurance payout – an amount that would once have seemed inconsequential to the superstar.

WHITNEY HOUSTON: HER LIFE IN PHOTOS

Houston was pinning her hopes on a movie she just wrapped – “Sparkle,” due out in August – to revive her flagging fortunes. She was the film’s executive producer, sang two songs on the soundtrack and played the mom of “American Idol” alum Jordin Sparks.

It was her first film in 15 years.

In 2001, at the height of her career, she signed a $100 million Arista recording contract and raked in up to $30 million a year touring. But then there was a stormy 15-year marriage to singer Bobby Brown, during which she notoriously became addicted to cocaine and booze.

LISTEN TO WHITNEY HOUSTON’S MOST IMPORTANT HITS

In what was then the most-watched TV interview in history, she told ABC News’ Diane Sawyer in 2002 that she used drugs, but insisted she was too rich to use crack.

“Crack is cheap,” Houston said. “I make too much money to ever smoke crack. Let’s get that straight, okay?”

Ten years later, her remaining riches had vanished.

“She’s flat broke,” RadarOnline quoted a source saying last month. “She might be homeless if not for people saving her.”

The Daily Mail reported that Davis had loaned Houston $1.2 million to pay off her debts and get clean. She went back to rehab last May.

“Whitney has admitted that she’s had to conquer a drug addiction. That takes all of her energy,” Davis, the chief creative officer for Sony Music Entertainment, told a Los Angeles radio station in June. “Right now, she’s dealing with that situation, and we’re not going to make another record or an album until that golden voice is there and is fully capable to knock everyone out.”

Rehab seemed not to have worked.

When Houston died Saturday, submerged in her hotel bathtub, after days of boozing and partying, a large number of sedatives were reportedly found nearby.

On Monday, Los Angeles coroner’s assistant chief Ed Winter countered reports that there was an inordinate amount: “There weren’t a lot of prescription bottles. You probably have just as many prescription bottles in your medicine cabinet.”

For some years, Houston had been embroiled in a nasty court fight over money with her stepmom, who had sued her for the $1 million payout on her father’s life insurance policy.

The stepmom, Barbara Houston, 51, said the insurance payout was supposed to pay off the mortgage on John Houston’s Fort Lee, N.J., condo. A Newark appeals court ruled in the singer’s favor.

Whitney Houston then countersued, demanding her stepmom pay the $1.6 million her dad owed her before he died in 2003. Her court papers shed light revealed how even her father was living off his daughter’s dwindling fortune.

She claimed she paid her dad an annual salary of $52,000 to $90,000 a year from 1991 to 1997 and loaned him $723,800 to buy and remodel his condo and paid for his cars and trips. Houston said her stepmom had been her dad’s housekeeper when they began dating in 1987, three years before he divorced her mother, Cissy.

Houston’s heir is her 18-year-old daughter, Bobbi Kristina Brown, who stands to become very rich from her mom’s passing.

Houston’s music took over the pop charts Monday as mourning fans bought up her albums and singles at a rapid clip.

“We have seen a very, very significant jump in sales,” said Keith Caulfield, charts editor at Billboard Magazine, who predicted that Houston’s “Greatest Hits” will reenter the magazine’s iconic Top 10 on Wednesday.

The album has not been that high on the charts in a full decade. A third of the top 30 songs at the iTunes store were Houston’s, including the classic “I Will Always Love You” at No. 1. Seven of Amazon’s Top 10 best-selling albums were Houston’s.

Billboard’s Caulfield said “I Will Always Love You” probably generated 100,000 downloads in just the first day after the tragedy.

He predicted Houston will see a bigger postmortem sales jump than Amy Winehouse, though not as big as Michael Jackson.

Jackson’s estate raked in $273 million in sales in the year after he died in June 2009.

Like a life insurance coverage fanatic, the very first factor that found my thoughts was I question just how much life insurance coverage this 48yr old lady had and when she’d done any estate planning.A source familiar with Houston’s financial situation told ABCNews.com that “she was far from broke.

Mere weeks after winning nine-year probate case against her own stepmother, glamour queen’s shock death and controversial financial shape raise the odds of much bigger courtroom battles ahead.Whitney Houston’s management had barely squelched rumors that the 48-year-old diva and recovering cocaine addict had run out of cash before they had to confirm reports that she was dead.

The latest news is that she fell asleep in the bathtub and drowned after mixing prescription painkillers with alcohol.

Now, it’s the disposition of Houston’s remaining wealth that is becoming the object of public scrutiny — and giving advisors plenty to mull where their own clients are concerned.

If Houston’s lawyers were smart, they ironed out her estate plan a decade ago, the gurus tell me.

Back in 2001, she had just signed the biggest record deal in history — six albums, $100 million in guaranteed royalties — and the signs of her drug use were getting harder to hide.

That combination of massive incoming wealth and rising litigation and mortality risks should have been all the incentive her advisors needed to set up long-term trusts and iron out her will.

Unfortunately, that was also the moment at which her career and personal life started to unravel, so they might have missed their opportunity — and as details come out, we might see the grim results.

A very complicated decade

Part of the problem is that Houston’s last decade was extremely complicated, so the lawyers had less time than we might think to keep her affairs orderly.

When she signed that $100 million contract, she was already carrying her long-time husband, Bobby Brown, and a young daughter.

Her father, who had managed her career up to that point, was slowly dying of heart disease and seems to have been perpetually hurting for cash.

In 2002, he sued her for a round $100 million, claiming he was owed that much for helping her beat marijuana possession charges and negotiate her big record deal.

That suit dragged on well after his death before being dismissed in 2004, robbing Houston’s lawyers of vital time to move that money into an asset protection trust.

As long as the lawsuit was pending, those record company millions were simply too hot to hide — any judge would have considered such a move a blatant attempt to defraud an existing creditor.

Two years of relative quiet followed, but Houston spent a lot of that time in and out of rehab, so any claims she was in “sound mind and body” to sign any estate documents may not hold up without challenge.

Her divorce from Bobby Brown dragged on through most of 2007. Her lawyers were on the ball here: she had a prenuptial agreement cutting him out of her money and any legitimate claim to spousal support.

After that, she drifted out of the limelight. And now she’s gone.

Fighting her father’s example

Given the haphazard way the Houston musical dynasty used sophisticated planning techniques to manage its millions, we might expect to see Whitney’s estate reflect a mix of good and bad advice.

On the positive side, Bobby has no claim on her money, and now that daughter Bobbi Christina is legally an adult — and out of the hospital herself — he can’t try to get custody and the money that goes with that.

And Houston’s father earmarked a $1 million life insurance policy to cover the mortgage on his house, so someone over the years was on the ball there.

Unfortunately, if Whitney and her father used the same lawyers, we can expect fireworks ahead.

John Houston appears to have died without clearly stating whether the life insurance money was meant to go to Whitney — who loaned him the money for the house in the first place — or to pay off his debt to his daughter.

He left behind letters talking about how Whitney made an oral agreement to apply the $1 million toward the loan, but her lawyers successfully noted that nothing like that was spelled out in his actual will.

In November — a full eight years after John Houston died — the case finally wrapped up in Whitney’s favor.

Had the lawyers set up a trust to accept the life insurance proceeds and use them to pay off the loan, his wishes would have been clear and none of the ensuing legal in-fighting would have been necessary.

As the judge noted, it’s impossible to legally determine what the deceased would have wanted, beyond what’s spelled out in the documents.

How much was Whitney worth?

The big question is how much of Whitney’s money the lawyers managed to save.

She died owing Arista three records, so a big chunk of that $100 million from the 2001 contract could be forfeited right away.

Her 10-acre New Jersey property was once appraised as worth $6 million but more recently listed for well under $2 million — barely what she owes in taxes and mortgage payments.

While rumor has it she was calling friends to borrow $100 a few weeks ago, her people insist that she wasn’t hurting for cash.

She’d just wrapped her first movie in 15 years, and as her staff says, she didn’t work for free.

“People get paid to make movies,” they point out.

And estate planners get paid to make sure the movie money lasts. Let’s hope Whitney’s lawyers earned their fees.

The Houston family is preparing for what could be a major payday. TMZ reports that the family is selling Whitney Houston’s funeral footage to “help maximize the estate for the benefit of Bobbi Kristina.” [TMZ]

In other Whitney news, the hotel room where she suddenly died has been stripped to keep looters from making quick cash. Everything from bed sheets, towels and even trash has ben removed from the room. It will supposedly be disposed of discreetly. [TMZ]

Could it be too early to auction off Whitney Houston items? A black velvet dress and earrings she wore during the Bodyguard will go to the highest bidder next month. The auction is expected to bring in a pretty penny.

The premature death of pop star Whitney Houston should serve as a concrete reminder to financial advisers to make sure that wealthy clients properly fund the trusts that they have set up for their heirs and that they update estate documents every few years. “Celebrity stories like this are a great educational tool to share with clients and highlight what should be done, what was done wrong and what was done right,” said Andy Mayoras, a Michigan estate planner.

At this point, it is too early to say what kind of shape Ms. Houston’s estate was in when she died.

But the six-time Grammy winner, who died Feb. 11 in a Beverly Hills hotel at 48, had a will that names her only child, 18-year-old Bobbi Kristina Brown, as the main beneficiary, press reports quoted a family friend as saying.

“At the very least, hopefully, a revocable living trust was set up and, even better, a series of trusts that are funded by the estate’s assets,” Mr. Mayoras said. “Would you want your 18-year-old daughter to inherit everything in a lump sum?”

Along with setting up insurance policies to fund the trusts, Ms. Houston should have updated her will, any trusts and her insurance beneficiaries after her 2006 divorce from R&B singer Bobby Brown, Mr. Mayoras said.

Ms. Brown is the only child from their relationship, though Mr. Brown reportedly has five other children from different relationships. LIFE EVENTS

Along with divorce, any life event such as the birth of a child, a move across state lines or remarriage should spark an updating of estate documents, Mr. Mayoras said.

Even without such changes, a wealthy client should review those documents every three to five years to account for new real estate or business ventures and to make sure that all assets are funded, said Mr. Mayoras, who co-wrote “Trial & Heirs: Famous Fortune Fights” (Wise Circle Books, 2009).

The estate planning that celebrities and high-net-worth clients require is complex and time-consuming, and that is often why it isn’t done, advisers said.

Celebrities are used to having things done for them, and they don’t want to devote the time to reviewing their situation, said Jeremy Kisner, president of advisory firm SureVest Capital Management, which has some celebrity clients.

The planning also requires stars to make hard decisions about whom to support — and with how much — as well as how to deal with estate- or tax-planning changes that may require them to give up some control and flexibility, he said.

“I find that especially with celebrities, they start the planning but never actually finalize it. This type of planning isn’t just done over a lunch meeting,” Mr. Kisner said.

A number of music industry stars have died without completing a will. That list includes Sonny Bono, John Denver, Jimi Hendrix and Bob Marley.

Ms. Houston, the 20th-top-selling artist in the United States of all time, with 55 million records sold, hopefully realized the importance of proper estate planning as a result of the scuffle between her and her stepmother when her father, John Houston, died.

Stepmother Barbara Houston sued Ms. Houston in 2008 over a $1 million life insurance policy that Mr. Houston left to his daughter. Barbara Houston said the policy was supposed to pay off the money that John and Barbara had borrowed from Whitney Houston to buy their New Jersey condo.

The younger Ms. Houston, who held the mortgage on that property, countersued and asked for repayment of the mortgage with interest. In December, an appeals court judge ruled in the singer’s favor because her stepmother didn’t have any signed documents to prove the insurance policy was meant to cover the mortgage loan.

“You should never name anybody as the beneficiary of a life insurance policy unless you want that person to keep the money,” Mr. Mayoras said.

Details of the financial state of Ms. Houston — who signed a $100 million record deal in 2001 but also admittedly suffered with drug problems — are being closely held by the family, which buried the star Saturday. The cause of her death isn’t expected to be known for a couple more weeks.

Regardless of its current value, Ms. Houston’s estate is expected to gain from the giant boost in song sales since her death, the August release of a movie she filmed with Jordan Sparks called “Sparkle,” all future projects involving her unreleased recordings, as well as sales from other assets, including a Mendham, N.J., mansion reportedly on the market for $1.75 million.

“There were rumors that she was broke, but that will certainly change,” said Lynnette Khalfani-Cox, contributing editor to Moneyrates.com. “We can expect at least a seven-figure increase to her estate, maybe more.”

Whitney Houston’s untimely death clearly presents much larger questions than tax and estate planning ones. Nevertheless, the latter are nothing to sneeze at. In fact, it was only a few weeks ago that Whitney Houston herself was dealing with a legal mess involving the death of her own father. See Whitney Houston Denies She’s Broke; Wins Lawsuit vs. Step-Mom.

Now there will be a much larger mess over Ms. Houston’s estate. The smaller question involved Ms. Houston’s father, John Houston, who died in 2003. Whitney had lent him money years before. Photos: Gallery: Famous Family Fortune Fights Tax Ideas For Songwriters Robert W. Wood Robert W. Wood Contributor Top Tax Tips From Zuckerberg’s Facebook Bonanza Robert W. Wood Robert W. Wood Contributor Whitney Houston Denies She’s Broke; Wins Lawsuit Vs. Step-Mom Danielle and Andy Mayoras Danielle and Andy Mayoras Contributor

The elder Houston was supposed to repay it, and one commonly-used mechanism was put in place to do that. Mr. Houston took out a life insurance policy on his own life and named his daughter as beneficiary. Upon John Houston’s death in 2003, the remittance of the policy proceeds to Whitney should have been smooth.

It was also structured not to constitute income to Whitney for tax purposes. Unfortunately, that’s where the good planning ended. Just as Cinderella faced a step-mother, so did Houston, and that’s where things got nasty.

Whitney’s step-mother was none other than Barbara Houston. It didn’t help that she was the forty-year younger woman who supposedly broke up John Houston’s marriage to Whitney’s mother, Cissy Houston. Whitney’s collection of the policy proceeds angered her step-mother.

Barbara Houston wanted the funds to pay off the mortgage on the residence she had shared with Whitney’s father so she sued Whitney. Whitney counter-sued and she and her step-mother Barbara became locked in a multiyear expensive legal battle. Whitney eventually won but only weeks ago, a victory she hardly had time to enjoy.

Is life insurance money free of income taxes? Is it estate tax-free? In both cases, the answer is not always.

However, properly set up, it is often possible to avoid having the insurance proceeds subject to income tax and even to estate tax. There are two independent sets of tax rules to navigate since the two taxes are distinct. You’ll need professional help to do so. Some kinds of insurance don’t qualify.

However, unlike so many tax rules, the tax rules governing insurance–and life insurance in particular–are surprisingly concrete. What about the rest of Whitney Houston’s estate? Perhaps as a result of her well-publicized problems which may have even been exacerbated by this unfortunate family litigation, there has been speculation that she was in dire financial circumstances. See Whitney Houston Denies She’s Broke; Wins Lawsuit vs. Step-Mom.

Whether that’s true may now be irrelevant. Still, as more Whitney Houston death news emerges, there are likely to be tax and estate planning lessons—and perhaps some bigger life lessons—for all of us.

Whitney Houston’s funeral this weekend provided the first public glimpse of what may be trouble involving her estate. Her ex-husband, Bobby Brown, was invited to the funeral, after reports surfaced that some family members didn’t want him there. He didn’t last long. Brown’s entourage wasn’t allowed to sit with him at the funeral. Brown wasn’t happy and left, visibly upset.Bobby Brown issued a statement after the funeral, saying he and his group were asked to relocate three times, and rather than making a scene, he chose to pay his respects quickly and leave.

TMZ reported the day before the funeral that Whitney’s mother, Cissy Houston, and other family members had been trying to keep Brown away from Bobbi Kristina, Whitney’s daughter with Brown. They were said to be worried that Brown would try to use Bobbi Kristina to make a play for some of Whitney’s money.

Brown’s statement confirmed some of this. He said that security prevented him from seeing his daughter at the funeral. Is money the reason why? Brown tried to get some of Whitney’s money through a court proceeding in 2007, just after their divorce judgment was entered, but he failed.Some have speculated that Whitney’s estate will be worth between $10 and $20 million, or more. At this point, that’s pure speculation. As we wrote a few weeks ago, Whitney’s camp previously denied rumors that she was broke. Certainly, between the royalties from increased record sales, and with prudent marketing of her name and image, her estate can bring in millions. But, because Whitney Houston only sang songs, instead of writing or producing them like Michael Jackson did, her estate won’t have the same earning potential.

Here’s an ABC News article that discusses her estate’s earning potential in more depth. The article quotes an unnamed source familiar with the situation who indicated that Whitney did have a will and that the estate process has been started. At this point, we don’t know how much estate planning she had in place. But, certainly, we can expect there will be millions of dollars at stake.

We hope that Whitney Houston’s estate planning included more than just a simple will. For the large majority of people with even a modest amount of assets, a will is not enough. Whitney Houston’s passing provides a perfect illustration of why this is true.

With a basic will alone, Whitney’s beneficiaries would generally receive their inheritances outright. Everyone expects that Whitney left most — and perhaps all — of her assets to her daughter Bobbi Kristina. Because Bobbi Kristina is 18, she would be entitled to receive everything at once under a simple will.

How many 18-year-olds do you know who are responsible enough to handle a large sum of money? Not many. And, again according to TMZ, there may be more concerns about Bobbi Kristina’s responsibility. Reportedly, family members want her to undergo drug rehab right away, because she has been struggling with substance abuse issues for years, much like her mother did.

If this is true, and if Bobbi Kristina is a beneficiary under a simple will, then this report raises a big concern. If she is controlled by drug abuse, Bobbi Kristina might not be competent to handle the money. If that’s the case, then family members could go to court, try to have her declared legally incompetent to manage her finances, and seek a conservatorship over her.

Who would have standing to do this? Bobby Brown for one. It could be the legal avenue he may try to use to seek control of the money, which is what Whitney’s mother and other family members are reportedly afraid of.

Think this won’t happen? Look at the Britney Spears case. Her father filed for conservatorship over her in 2008 due to her out-of-control behavior caused by substance abuse, and she is still subject to it, even though she’s turned her life around and is engaged to be married. As we’ve written before, in Britney’s case, that process may have actually saved her life, but that did come at a cost to Britney’s personal freedom in many respects. You can read more about that case here.

Will Bobby Brown try something similar? He could. At least, if Whitney Houston only had a basic will.

If Whitney Houston did the right estate planning, by using a trust, this result could be avoided. Unlike a will which passes through probate court, a trust is handled privately, outside of court, when used properly. Trusts normally have provisions to spell out what each beneficiary would inherit, and when and how. Usually, young adults don’t receive money under a trust, until they reach a certain age. Often trusts spell out that the beneficiaries’ money is to be managed by a trustee and used for their benefit, for things like education, health and living expenses, but not given directly to them to control and spend.

In fact, trusts can be even more creative, such as those with drug and alcohol language that requires beneficiaries to be “clean” before they receive their money.

Did Whitney properly protect Bobbi Kristina with a trust? Is there an opening for Bobby Brown to cause trouble? We will likely find out in the weeks to come. Certainly, there are enough reports, justified by what happened at the funeral over the weekend, to create serious cause for concern.

It’s a lesson for everyone. No one knows when tragedy may strike. For most people, having a simple will is not enough. A properly-funded trust, with detailed distribution provisions specifically tailored for your beneficiaries, based on your wishes, is the best way to protect your loved ones after you pass.

Too many people — the rich and famous, and not-so-rich-or-famous alike — fail to do the proper estate planning, and it’s the family members left behind who pay the price.

February 26 Update — A report surfaced today that Bobby Brown is worried about Bobbi Kristina and is considering seeking conservatorship over her if she doesn’t get her life back on track.

The valuation of life insurance policies can be challenging, and fights between vendors of qualified and non-qualified plans and the IRS over valuation are widespread. Springing cash values tend to be an operative issue in these debates between plan vendors and the IRS. Springing cash values refer to life insurance funded welfare benefit trusts, qualified defined-benefit plans, and Volunteer Employee Benefit Association plans that distribute the policy at a very low cash value that later increases substantially over a few years’ time.

Springing Cash values cause major debates over whether the insured should report a policy’s value or cash surrender value as income when he is transferred the policy. Not surprisingly, buyers, administrators, and sellers argue that the cash surrender value (typically $0) is the correct amount, while the IRS argues that a much higher account value is appropriate.

Highlighting the confusion surrounding the correct valuation for these policies is the case of Schwab v. Commissioner (136 T.C. No. 6) in which the insured claimed zero income by using the cash surrender value for two VUL life insurance policies he received from a multi-employer welfare benefit plan. One of the policies continued after its distribution and the other terminated shortly after its distribution. The IRS asserted that the correct valuation was $80,000.

The issue at hand was whether the accumulation account could be used to pay future insurance costs—if so, the value would be $80,000, and if not, the value would be $0. The court held that the correct values should be based on the guaranteed cost of insurance from the date the first policy terminated to the date the second policy’s premium was paid. The court further held that the evidence presented did not convince the court that options were available for the insured to use the accumulated cash value to pay costs relating to maintaining the policies in force.

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